Business Studies Paper 1 Questions and Answers - Form 3 Mid Term 3 Exams 2023

QUESTIONS

1. Outline four reasons why organizations need to safe keep documents in files (4mks)
2. Give the four components of business studies (4mks)
3. A business is expected to be socially responsible to various groups such as customers, employees, government, public and suppliers. Indicate against each statement the most appropriate group (5mks)
   

   Statement	Group
   i) Fair remuneration
   ii) Timely tax returns
   iii) Fairness in tender allocation
   iv) Equal job opportunities
   (v) Quality products

4. Use the table below to outline four differences between basic wants and secondary wants       (4mks)
   

   Basic wants	Secondary wants

5. Identify three activities in the extractive level of production (4mks)
6. Outline four ways in which partners may be classified (4mks)
7. Highlight four characteristics of mail order store (4mks)
8. Outline the meaning of the following terms as used in accounting (4mks)
   1. Network of a business
   2. Business transaction
   3. Cash transaction
   4. Credit transaction ……………………………………………………………………………………..
9. State four main factors that may limit the level of a country’s national income. (4mks)
10. Identify four ways in which a business may be of benefit to people in the surrounding area (4mks)
11. State the effect of each of the following transaction on the balance sheet by writing increase or decrease or no effect in each case.
    

    Transaction	Effect
    a) Bought machinery on credit
    b) withdrew cash from the business for personal use
    c) Purchased stock in cash
    d) Paid outstanding by cheque

12. State four ways of increasing efficiency and effectiveness of human porterage
13. The following information relates to Makuyu Traders. Determine the missing figures. (3mks)
    

    	Assets	Liabilities	Capital
    (a)	50000	70000
    (b)	320000		280000
    (c)		14360	12000

14. Post the following transactions in the ledger books of Embakasi traders (4mks)
    March 1/2013 commenced business with sh. 150,000 cash at bank
    March 5/2013 bought machinery in credit for sh. 9500
    March 7/2013 withdrew sh 5000 from bank for office use
    March 8/2013 paid sh 3000 cash to creditor
15. Give four reasons that make insurance companies decline to insure acts of nature (4mks)
16. Name 4 sources of business ideas. (4mks)
17. State 4 office etiquette of a business person. (4mks)
18. Mention four main types of demand. (4mks)
19. State 4 principles of cooperatives.  (4mks)
20. Name 4 methods of government involvement in business (4mks)
21. Name 4 types of public utilities. (4mks)
22. Name 4 barriers of effective communication. (4mks)
23. Name 4 types of life assurance contracts (4mks)
24. Name 4 characteristic of a good filing system. (4mks)
25. Give 4 characteristics of oligopoly market structure. (4mks)

MARKING SCHEME

1.  
   1. Outline four reasons why organizations need to safe keep documents in files (4mks)
      • not to fall in unauthorized hands
      • protect from damage
      • not to get lost
      • keep thieves at bay
      • avoid misplacement
2. Give the four components of business studies (4mks)
   • Economics
   • commerce
   • office practice
   • accounting
   • entrepreneurship
3. A business is expected to be socially responsible to various groups such as customers, employees, government, public and suppliers. Indicate against each statement the most appropriate group (5mks)

   Statement	Group
   i) Fair remuneration	Employees
   ii) Timely tax returns	Government
   iii) Fairness in tender allocation	Suppliers
   iv) Equal job opportunities	Public
   (v) Quality products	Customers

4.  
   

   Basic wants	Secondary wants
   Requirements for life	One can do without them
   Necessary for survival	Make life comfortable
   Cannot be postponed	Can wait for later use
   Appear first in scale of preference	Are last in scale of preference
   Are felt needs	Aren't felt

5. Identify three activities in the extractive level of production (4mks)
   • farming
   • fishing
   • mining
   • timbering (lumbering)
   • Hunting
6. Outline four ways in which partners may be classified (4mks)
   • role played by partners
   • liabilities of the partners for business debt
   • ages of parties
   • capital contribution
7. Highlight four characteristics of mail order store (4mks)
   • goods are sold through the post office
   • have large warehouses
   • don’t deal with perishable goods
   • customers don’t visit selling premises
   • there is heavy advertisement
   • goods are dispatched through CWO basis or COD basis
8. Outline the meaning of the following terms as used in accounting (4mks)
   1. Network of a business -it is simply the difference between total assets and total liabilities also referred too as capital which comprises of owners contribution plus profits less drawings
   2. Business transaction -any dealing between two or more people (parties) that can be assigned a monetary value
   3. Cash transaction where both parties of an exchange are executed immediately
   4. Credit transaction where goods or services are sold or bought and payment is made at a later date
9. State four main factors that may limit the level of a country’s national income. (4mks)
   • poor entrepreneurial culture in the country
   • low level of technology
   • negative altitudes towards work by citizens
   • lack of adequate resources
   • political instability
   • lack of co-operant factors of production
10. Identify four ways in which a business may be of benefit to people in the surrounding area (4mks)
    • job opportunities
    • goods and services to satisfy their needs
    • increase in economic activities
    • outlet for the producers to sell their products
    • People become sensitive to the needs of their environment
    • Improves life of people living standards
11. State the effect of each of the following transaction on the balance sheet by writing increase or decrease or no effect in each case

    Transaction	Effect
    a) Bought machinery on credit	Increase
    b) withdrew cash from the business for personal use	Decrease
    c) Purchased stock in cash	No effect
    d) Paid outstanding by cheque	Decrease

12. State four ways of increasing efficiency and effectiveness of human porterage
    • shortening distance travelled
    • creation of pathways
    • Lighten the load
    • Feeding porters properly
    • Better paySecurity pathways
    • lightening pathways
    • coach them
    • on ettiquaette
13. The following information relates to Makuyu Traders. Determine the missing figures. (3mks)
    1. Assets – liabilities 50,000 − 70,000= - 20,000
    2. Assets – capital = 320,000 − 280,000 = 40,000
    3. capital + liabilities = 14360 + 12000 = 26360
14. Post the following transactions in the ledger books of Embakasi traders (4mks)
    March 1/2013 commenced business with sh. 150,000 cash at bank
    March 5/2013 bought machinery in credit for sh. 9500
    March 7/2013 withdrew sh 5000 from bank for office use
    March 8/2013 paid sh 3000 cash to creditor
    
15. Give four reasons that make insurance companies decline to insure acts of nature (4mks)
    • loss may not affect many people at ago
    • loss is unpredictable
    • people not willing to form pool
    • not easy to determine premium
    • value of loss may be undeterminable
16. Name 4 sources of business ideas. (4mks)
    • Newspapers
    • Shows & exhibitions
    • Magazines articles
    • Waste products
17. State 4 office etiquette of a business person. (4mks)
    • Respect
    • Punctuality
    • Loyalty
    • Honesty
18. mention four main types of demand. (4mks)
    • Joint demand
    • Competitive demand
    • Derived demand
    • Composite demand
19. State 4 principles of cooperatives. (4mks)
    • Voluntary & open membership
    • Democratic Administration
    • Limited interest on share capital
    • Promotion of education to member
20. Name 4 methods of government involvement in business (4mks)
    • Regulation
    • Training
    • Trade promotion
    • Provision of public utilities
21. Name 4 types of public utilities. (4mks)
    • Water
    • Transport
    • Power & communication
    • Sewerage
22. Name 4 barriers of effective communication. (4mks)
    • Language barrier
    • Poor listening
    • Negative attitude
    • Poor timing
23. Name 4 types of life assurance contracts (4mks)
    • Term insurance
    • Whole life assurance
    • Endowment
    • Annuities
24. Name 4 characteristic of a good filing system. (4mks)
    • Simplicity
    • Suitability
    • Elasticity
    • Economical
    • Accessibility
25. Give 4 characteristics of oligopoly market structure. (4mks)
    • A few large firms
    • Presence of price wars
    • High interdependence of firms
    • Kinked demand curve
    • Formation of cartels